Benefits and Compensation, HR Management & Compliance

2023 is the Year Organizations Must Get Serious About Distributed Work. Here’s Why…

Prior to March 2020, remote, distributed and hybrid work were novelties reserved mostly for freelancers, consultants, independent contractors and only in specific, rare occasions for full-time employees. COVID-19 changed that, creating an environment, practically overnight, in which distributed workforces became the status quo and essential for moving business and our economy forward.

distributed work

Perhaps no other workplace transformation has become so firmly and globally embedded at this same rate. Over the last two years, employees have come to expect the freedom to work from anywhere, and this flexibility has become a crucial component of an exceptional employee experience.

Many employees have even quit their jobs to gain this autonomy and freedom to work wherever they choose, and for some, it’s been a key factor when considering a new employer. Companies have faced petitions and protests for even considering forcing workers back to the office full time.

But even as distributed work has become widespread, two years later, a surprising number of companies have yet to implement formal policies, processes and platforms for managing it effectively. The lack of formalized programs and workflows has put HR in a precarious position: struggling to manage the growing number of remote work requests with tools that weren’t designed for it (like spreadsheets), and unable to deliver the compliance necessary to protect the organization from risk.

Choosing a Path Going Forward

The COVID “free pass” is expiring, so this all must change in the coming year. As we approach 2023 amid economic uncertainty, companies must get a handle on where employees are working from, implement efficient solutions to manage talent mobility and protect themselves from fines, penalties and legal issues.

To that end, here are three trends we expect to see take shape over the coming year.

1. A renewed focus on compliance.

Each country, state and/or city where employees work may have its own unique rules about payroll tax withholding or the length of stay permitted before tax and/or immigration rules kick in. This applies not only to remote work of the employee’s choice, but also company-directed assignments and business travel, as well. If companies don’t know where employees are working because there’s no formal request or reporting protocol, there can be severe consequences. Violation of these policies can result in financial penalties and legal action for the employer, and the employee may lose their visa or be forced to pay fines or back taxes.

For the last two years, many locations have been either lax or very forgiving when it comes to enforcement because of the urgency that COVID-19 presented, but also because they, too, were unsure how to handle it. Expect that forgiveness to wane as governing bodies, recognizing the potential revenue opportunities, crack down on policies and enforcement.

That means organizations must discuss compliance issues with employees and implement protocols to ensure laws are being followed to protect both the company and its workforce.

2. Business travel returns with gusto.

With COVID-19 fears subsiding, more people will begin traveling for business again—we’ve already seen many events reintroduce an in-person component and many teams have resumed quarterly or bi-annual off-site huddles. That means companies will need to dust off and modernize their business travel policies that may have been shelved since early 2020.

Most notably, expect employees to embrace “workcations”—extending business travel dates by a few days to explore and enjoy the area. You’ll want to write policies that establish parameters for these extended trips. What qualifies as remote work vs. requires taking an actual PTO day? How many days can the trip be extended before and/or after the business purpose?

By clarifying policies now, companies can be prepared for these scenarios, have programs in place to guide decisions and protocols for managing the request and approval process.

3. Broader implementation of formal flexible work policies.

An overwhelming 94% of employees agree they should be able to work from anywhere as long as their work gets done. And 84% of HR leaders say flexible work is a key part of their company’s talent strategy. In order to appease employee demand and protect the organization, companies will need to be intentional about creating formal policies and communicating them clearly.

For example, companies may want to set parameters on the locations in which employees may work—working from home two or three days a week may be fine, but perhaps working in another state requires a formal request and director-level approval. Or they may establish boundaries around which roles can be fulfilled outside an office location. Another option may be to limit the number of off-site work days on a time basis that makes sense, such as 10 days a quarter or 30 days a year.

Distribution Becoming the Norm

Distributed workforces are becoming status quo, and 85% of HR leaders expect remote and distributed work requests to increase. With so many employees, locations and scenarios to keep track of, HR will need more than a spreadsheet to manage it all and ensure organizational compliance.

Already 88% of companies with flexible work policies are investing in global talent mobility management tools and technologies, and we expect that number to grow. As more companies formalize their programs and recognize the complexity of managing a distributed workforce, investing in technology will become essential for allowing companies and their employees to fully leverage the benefits of a mobile, distributed workforce.

Shawn Farschi is the CEO of Topia, which provides technology for global talent mobility, the HR practice of strategically deploying employees around the world.